Week of Monday, March 10

March 10, 2008

Intergovernmental Services Weekly Legislative Update

The AMC Weekly Update summarizes the prior week’s legislative action, highlighting the current week’s anticipated action.

General Government

Governor Pawlenty’s Budget Released

On Friday, March 7, 2008, the governor released his supplemental budget outlining his plan to erase the projected $935 million deficit projected in the state’s February economic forecast.  Counties and cities were held harmless in areas such as County Program Aid and Local Government Aid, while most state agencies would face across-the-board spending reductions of 4 percent.

Governor Pawlenty also suggested a state-wide sales tax reduction of 1/8^th percent and held K-12 education spending harmless.  The governor’s supplemental budget uses $250 million from the state’s reserve fund, an additional $250 million surplus in the healthcare access fund and $92 million in TANF funds to bring the state’s budget back into balance.  The governor also proposed new benefits for veterans and the military, including some new tax exemptions.

The governor insists that he will not allow taxes to be raised to balance the budget; however, he does support closing the Foreign Operating Corporations loophole in state law, which will raise an estimated $102 million this biennium and $160 million in 2010-2011.  It is unclear at this point whether the DFL-controlled legislature will use the governor’s budget as a starting point, or craft their own proposals.

For more information about the governor’s budget proposal click here.  

Upcoming Events: 

The governor’s supplement budget hearing will be expected to be held this week.  At this writing there are no set schedules for the hearings.  Bills of interest include: 

For more information, please contact:  Joe Mathews, AMC Policy Analyst

Health and Human Services

Governor’s Budget

The governor proposed reductions of $2.5 million in the Minnesota Department of Health (MDH) budget for FY09. These include:

·          Reducing tobacco prevention grants by $325,000 of the current $2.5 million;

·          Eliminating a four-county community-based health care demonstration project funded in 2007 ($212,000); and

·          Eliminating a 2007 increase in funding for lead abatement.

The budget would also reduce agency operations by 4 percent.  This reduction does not include grants or services to individuals.

Department of Human Services Budget

The Department of Human Services (DHS) budget includes general fund reductions of approximately $88.5 million for the remainder of FY08 and $435 million for FY09.  Most of these reductions are achieved by transferring balances in the health care access fund or HCAF ($250 million) and the TANF fund ($39 million) to the general fund and funding transitional MinnesotaCare from the HCAC for general fund savings of $48 million.  Among the changes most relevant to counties are:

·          Limiting growth in the Community Alternatives for Disabled Individuals (CADI) and Traumatic Brain Injury (TBI) MA waiver programs (almost $5 million) and freezing enrollment in the Minnesota Disability Health Options program (MNDHO) for three years;

·          Transferring the fund balance in the CD treatment fund to the general fund ($2.5 million);

·          Withholding the federal share to counties when counties are over 90 days late in paying for State Operated Services ($2.2 million);

·          Delaying expansion of several MinnesotaCare provisions authorized in 2007, including the outreach grant program;

·          $2 million in new spending for competitive grants for American Indian chemical dependency;

·          Eliminating rate increases for hospitals and non-nursing home long-term care services and reduce some pharmacy rates, but increase nursing home rates;

·          Delaying grant payments to counties for some adult mental health grants;

·          Restoring the requirement that four counties repay the state for overspending in the disability waiver. This overspending was forgiven last year by legislature; and

·          Reducing state agency operations by 4%.

The budget also contains some provisions to comply with federal changes resulting from the 2006 Deficit Reduction Act.

County-based Health Care Purchasing Bills

County-based purchasing bills were heard in both the House and Senate HHS Policy Committees last week. AMC staff and several county representatives testified in support of all the bills.  After strong testimony on sides and spirited debate, the two more limited bills moved forward in the Senate (SF3031 Lynch and SF3181 Lourey).  The Lourey bill (SF3181) passed the Senate policy committee but has yet to be heard in the House.  In the House, the Lynch companion (HF3380) authored by Rep. Liebling, also passed.  The AMC bill (HF3524 Liebling/SF3241 Erickson-Ropes), which would have expanded single-plan county-based purchasing to any interested non-SMA county, failed in both bodies.  While there was considerable support for county-based purchasing as a way to integrate health and social services, concerns about choice, lack of competition, and conflicts about market-driven versus single-payer health system ultimately prevailed.  The bills now move on to the Finance and Government Operations committees.  SF3322-Prettner-Solon, which would place additional restrictions on county-based purchasing based on recommendations of the legislative auditor, also passed and was referred to Finance.  Similar language was amended on to (HF3380) in the House.

Thanks and congratulations to great testimony provided on behalf of AMC and counties from Olmsted County Commissioner Mike Podulke, Cottonwood County Commissioner Norm Holmenn, Steele County Director Kelly Harder, Yellow Medicine County Director Peg Heglund, and Prime West and South Country Executive Directors.

Other Activity:

·          Health Reform bills SF3099 (Berglin) and HF3390 (Loeffler) and HF3391 (Huntley) were heard and passed in Commerce, Judiciary, and Education Committees;

·          Senate Finance held a hearing and questioned DHS on the termination of their contract with HealthMatch, a project to automate enrollment in publicly funded health care programs;

·          DHS policy and technical bills and MFIP bills were heard in House Health Policy and passed to the floor or the Finance committees.

Upcoming Events:

·          Overviews of the governor’s budget are scheduled in the House and Senate;

·          Testimony on the governor’s budget is scheduled for Thursday in both bodies (AMC will be testifying);

·          Various MFIP and child care bills are scheduled for Public Safety and other committees in both house and senate;

·          SF3151(Lourey) on county-based purchasing will be heard in Senate Government Operations on Friday.

For more information contact:  Patricia Coldwell, AMC Policy Analyst

Transportation

Capital Investment – Transportation/ Economic Development

This past week the House and Senate passed their capital investment bills and named their conferees. The Senate passed their bill SF 3285 on Tuesday, March 4, 57-9.  The Senate conferees are Sen. Keith Langseth, Sen. Sandy Pappas, Sen. David Tomassoni, Sen. Linda Scheid, and Sen. Paul Koering.

The House passed their bill capital investment bill HF 380 on Thursday, March 6. 99-34. The House conferees are Rep. Alice Hausman, Rep. Jean Wagenius, Rep. Loren Solberg, Rep. Bev Scalze, and Rep. Kathy Tingelstad.  The transportation and economic development provisions are as follows.

Transportation Related Bill Updates

Gas tax increase for ATVs

HF3201 (Lenczewski) increases the percentage of gasoline used for the operation of all-terrain vehicles from 0.15% to 0.27%.  The bill was passed by both bodies and signed by the governor.

Wheelage tax

HF 3201 (Lenczewski) also repeals the levy offset requirement if a metro county imposes a wheelage tax. The bill was passed by both bodies and signed by the governor.

Reductions for Metro Transit and Greater MN Transit

The governor’s proposed supplemental budget recommends a 4% reduction of general fund revenue or $29.9 million in FY 2009 to the Metropolitan Council.  This funding would reduce service provided by Metro Transit.  The proposal also recommends a 4% reduction of general fund revenue or $1.7 million in FY 2009 for Greater Minnesota transit.

Appointments

SF2927 (Saltzman) was heard in the Senate Transportation committee.  The bill would require the Commissioner of MNDOT to appoint a deputy commissioner / chief engineer who is a licensed professional engineer.  The bill was passed and re-referred to the State and Local Government Operations Committee.

Street improvement districts

HF3248 (Scalze) that authorizes municipalities to establish street improvement districts and apportion street improvement fees within districts was heard in the House Local Government and Metropolitan Affairs Committee and  laid over for further consideration.

User fees for HOV lanes

SF3058 (Rest), authorizing urban partnership agreements to impose  user fees on high occupancy vehicle lanes and dynamic shoulder lanes was heard in the Senate Transportation Committee and passed as amended.

Operation and maintenance of commuter rail facilities

SF3137 (Betzold), requires the Metropolitan Council to operate and maintain commuter rail facilities and services in any corridor that is located in whole or in part in the metropolitan area.  The bill was re-referred to the Senate State and Local Government Operations Committee.  

For more information, please contact:  Carol Lovro, AMC Policy Analyst

Public Safety

Governor’s Budget

The governor proposed a $17 million reduction for public safety in the next fiscal year.  This includes the courts, public defenders, POST, Human Rights Department, Department of Public Safety and Department of Corrections.

The Department of Corrections was given a pass on any reductions except for aid to counties.  They came up with a $3.1 million annual ongoing reduction by reducing reimbursement for Short-Term Offenders (STO) and Sentencing to Service (STS) Grants.  The increases given in the last year’s budget for both these grant programs were proposed to be taken away.  Therefore, County reimbursement for this year's STO will remain at the approximate $30 a day rate adopted in last session’s bill, but it will go back to the less than the $10 a day rate for State FY 2009 (beginning July 1, 2008).  This is the bulk of DOC saving at $2.5 million a year.  It is worth noting that the number of STO’s has increased over the last few years, so while the total appropriation for 2009 will be that of 2007, the reimbursement per offender will be less.

The STS grants provide a $600K yearly savings.  STS is grants to counties for service crews of the convicted to pick up litter and such.

The major corrections grants for CCA, CPO, caseload reduction and others received no reductions. 

For more information, please contact:  Ryan Erdmann, AMC Policy Analyst

Environment & Natural Resources

Governor’s Budget

On Friday the governor released his FY09 supplemental budget aimed at addressing the state budget deficit. BWSR proposed changes are:

·          Grants cuts: $-200K per year for native buffers coast-share and $-100K per year for county weed management cooperatives.

·          Administration cuts: $-150K per year for drainage assistance = -1.5 FTE.

·          Increases for South East Flood Response:  $+450K in FY09 and $+275 for FY10.

Solid Waste

Last week there were hearing held on HF 3577, Representative Gardner's solid waste bill.  As introduced, AMC and the Solid Waste Administrators Assoc (SWAA) membership expressed many concerns about the language in the bill.  Representative Gardner was very receptive the concerns and either they were remedied or stricken from the bill.  On Tuesday another solid waste related bill also introduced by Representative Gardner HF 2777 was heard.  AMC staff testified in favor of the bill, which the author acknowledged is not a possibility this year but many representatives on the committee acknowledged that SCORE payments to counties need to increase.  Randy Kiser, Hennepin County, attended the committee hearing to testify on behalf of SWAA.

SSTS:  Last week SF 3386, a bill about SSTS licensure, was introduced and received a hearing on Tuesday. AMC staff worked with the MN Onsite Wastewater Association and the bill authors to change the language that ensures that local units of government can be more restrictive in the licensure they require for septic design or installation.   

SF2648/HF2737 was heard and adopted Friday with a minor amendment limiting it to easements held by BWSR. "In greater than 80 percent areas, preservation of wetlands subsequently protected by a state conservation easement held by the board of water and soil resources may be eligible for wetland banking credits, according to rules adopted by the board." The bill will dovetail with current Wetland Conservation Act rulemaking efforts and the results of the NE Wetland Mitigation Strategy/Assessment.  

HF3786/SF3428 was heard last week.  The bill language would increase the amount a drainage authority can be assessed and hold in a maintenance fund from $40K to $200K.  The last time this was changed was in 1980.  The Drainage Work Group has had only limited discussion and thus bill will likely not go anywhere further this year.

SF2943/HF3437 were both heard in the last two weeks.  The bill would establish a process to provide recognition to lakes (and rivers) that met certain performance and organizational standards.  AMC and LMC have had discussions with the house and senate bill authors about amending the bill to provide for more clarity of lake association duties and responsibilities.  LGU's want to ensure that another layer of work is not created and that it is clear that LGUs are the permitting authorities.  HF 3437  will be heard in committee this week in the House.

Upcoming Events: 

This week will be a very busy week for land use and solid waste bills.  The solid waste bills that were heard last week will continue to move through committees.  Land use bills of particular concern to counties are:

HF3574/SF3291 – State building code – while this bill says that builders statewide must build to code it does not state that LGUs must enforce the code unless they choose to do so.  AMC is not opposing this bill as written.  This bill will be heard in both the house and senate on Monday.

HF1254 – Moratoria - This bill would prohibit a local unit of government from putting an interim ordinance (moratorium) in place on anything that has a completed application submitted.  Last year this bill did not receive a hearing but AMC and the MN Association of County Planning and Zoning Administrators opposed this bill as written due to the many unintended consequences the bill could result in.  This bill will be heard in the House Local Government Committee on Monday

HF3313/SF3268 – Interim Use - This is a bill has been brought forward by Sherburne County.  The bill would help clarify interim use ordinances and give counties authority to use them (cities and towns already hold this authority). AMC and MACPZA are supportive of this bill.

HF2536–Watershed Basins -